This rendering shows a seven-story Koreatown building designed by Gruen Architects will hold a museum and 103 apartment units. (Photo courtesy by Gruen Architects)

A building boom is underway in Los Angeles' Koreatown, bringing residents and tourists to this dense neighborhood seen by some as a model for Southern California urban living.

But the cranes and construction are also fueling debate over affordable housing and Los Angeles City Hall's role in encouraging low-cost development.

This rendering shows a seven-story Koreatown building designed by Gruen Architects will hold a museum and 103 apartment units. (Photo courtesy by Gruen Architects)

Larry Gross, executive director of the Coalition for Economic Survival, a tenants' rights group, calls Koreatown one of the "hot spots" for high rents and renters' evictions as developers remake city blocks.

"It's been one of the hardest hit neighborhoods," Gross said.

Koreatown's development was in the spotlight last week as City Hall officials unveiled new plans to lease a city-owned parking lot to a nonprofit, which intends to build a museum and a 103-unit apartment complex on the site.

Under the proposal, the $20 million apartment complex will generate revenues to run the Korean American National Museum, a much-needed cultural anchor for Koreatown, backers say.

Los Angeles City Council President Herb Wesson and museum board members said last week that the apartments wouldn't contain affordable housing, news that was criticized by advocates like Gross.

On Friday, Wesson's office said 10 percent of the apartment's units would be designated as affordable.

"The council president has been in ongoing conversations with Korean American Museum representatives and is pleased to confirm that the project will include a 10 percent senior affordable housing component further enriching the benefits received by the city and local community," Wesson spokeswoman Vanessa Rodriguez said.

Two museum board members, however, gave contradictory answers Friday, with one member suggesting Wesson's office was reacting to media coverage of the development.

"I can't make that commitment," said board member and developer David Lee, of the affordable housing element.

The affordable units will run about $4 million, Lee said, questioning who will pay for the increased costs.

He added that talks with Wesson's office on the project will continue.

Wesson's push for the affordable units follows moves by several other Los Angeles officials to encourage such housing.

Los Angeles City Councilman Mitch O'Farrell introduced a motion last year that would require developers to help pay for affordable housing in exchange for city exemptions, like being able to build taller buildings.

Officials also want to find new revenue streams for the city's Affordable Housing Trust Fund, which helps create rental housing.

Highlighting the demand for cheap apartments in Koreatown, a 52-unit affordable housing project on New Hampshire Avenue received 4,000 applications in one week, said Takao Suzuki, a director at nonprofit Little Tokyo Service Center, which develops affordable housing.

Suzuki believes Koreatown's transit lines — the neighborhood is served by the Red Line, making it easy to get to downtown, and eventually, the Westside — are helping drive up land prices.

"Because Koreatown is pretty transit-rich, developers see value, and because of that, prices are going up," Suzuki said.

The higher rents are affecting Koreatown's low-income Latino and Korean residents, said Cecily Jackson-Zapata, an attorney specializing in nonprofit law at Sustainable Law Group PC.

Wesson's 10 percent affordable housing mandate for the nonprofit project is "great," Jackson-Zapata said. But she suggested those units shouldn't be just for the elderly.

"There's a lot of low-income residents that are ignored in Koreatown," she said.

City officials are expected to consider the lease with the museum and apartment complex later this year.